[Felix_Nietzsche]

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But China will not sell its dollars cheap like that. It will simply start selling them at the Forex going rate.

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Any MASS selloff will result in the seller taking a bath.
If they divest their investments more slowly to maximize their selling price then there were be little impact to the USA. The $1 an ounce gold scenario was using exageration to make a point. The USA is one of the best countries in the world to invest in. Any China selloff of assets will not change this and others will line up to take their place.

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I see nothing fantastic in this scenario. American banks will be powerless to buy hundreds of billions of dollars that China holds, Federal government is currently running a huge deficit, financed mostly by foreign based entities, and our debt obligations are considerable. Surely you can see that dollar sell-off might hurt our ability to import cheap crap from China, and ruin our economy driven by consumer spending.

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Wow.....
You really buy into this doomsday scenario. First China would never do this and second China does not have the power to ruin our economy. This scenario is just a self-hating American wet dream.

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yet some actions of US may be so strategically intolerable for China, that it will be willing to absorb the pain to make us stop.

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China is pursuing their own interests and the USA should do the same. When it comes to leverage, China needs the USA more than we need them....

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And I concede that China may lose even more from this move,

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We are in agreement here.